So, before we start selling what we’ll kindly refer to for now as “bottom tier” properties at top dollar, I want to take just 30 seconds to tell you about something else a little, well, “magical” in real estate today. If you’re in the market for a home with a conventional 30-year-fixed-rate mortgage at this time, then you could actually land the lowest interest rates in HISTORY according to a certain Fed analyst…IF you know the signs to watch for and are ready to move fast. Want to know what’s going on behind the scenes with our lending industry? We’ve got all the details in our News and Networking section at REI.Today.
Now, let’s get back to selling that starter home for thousands over market value. Here’s the deal:
According to Zillow – and say what you will about Zillow, they’ve got a lot of data to use when they want to start analyzing and doing statistical research, so we listen when they start making observations about what sells – a certain word, when included in a listing for what the real estate data giant determined a “bottom tier” home, basically a starter home or what some investors refer to as their “bread and butter homes,” not middle or high-end houses, but the simple, three-bed two-baths (or sometimes two and one) that first-time homebuyers tend to purchase, can make a huge difference in terms of sales price. Essentially, if the median “bottom tier” home is listed at $110,000 (that is right at the national median, by the way) then including this word in your listing could tack on just over $9,000! Hard to believe? Maybe, but who are we to argue with millions on millions of listings to analyze?
So are you ready for the word yet? Here we go and I warn you, it’s not one that you’d usually think of putting in a “bottom tier” home listing. However, quite frankly, based on these numbers, I’d consider giving it a shot. Here we go…the word is: LUXURIOUS.
Now, if you’re like me, you probably immediately thought, HECK NO I’m not putting that on my listing. There’s just nothing luxurious about my run-of-the-mill three-bedroom two-bathroom starter home and there’s no way that buyers are going to do anything other than laugh at me. But here’s the thing: In reality, you’re passing up the opportunity to laugh all the way to the bank. Let’s take a closer look at why Zillow analysts think that LUXURIOUS is particularly meaningful in this sector of homes. It might surprise you.
Zillow analysts Spencer Rascoff and Stan Humphries (Mr. Humphries, by the way, is Zillow’s chief analytics officer and Mr. Rascoff is the CEO of Zillow Group) speculated that people looking for different types of properties actually interpret luxury in different ways. While most of us not actually looking for a home may think “Lifestyles of the Rich and Famous” when we hear the word “luxurious. Mr. Humphries and Mr. Rascoff noted that a buyer actually in the market for a bottom-tier home probably thinks “high-quality amenities” (or something to that effect) when they hear the word. As a result, even if it’s not entirely a conscious decision, they are more likely to be interested in a self-proclaimed “luxury” property and, ultimately, that property is likely to snag a higher sales price. And if you legitimately cannot in any way shape or form claim that your property itself is luxurious, if you can claim access to any arguably luxurious amenities (say, provided by an HOA), then do so! It could make that listing stand out just enough to get that price bump.
Now I also found it very interesting that this magic word snagged a much higher price bump on lower-end homes than on higher-end ones. Again, it probably has a lot to do with the mindset of the buyer. For higher-end homes, the same adjective, probably more aptly applied if we want to be brutally honest, only snagged about a 6.5 percent price bump on the sales – although that’s certainly nothing to sneer at. On a $250,000 home, that would be more than $16,000. On a $500,000 home, that would be more than $32,000, and, well, I think you get the drift.
Now there were several other “magical” listing words that you can use on various “tiers” of home to really make your listing pop and, I’ll be honest, I bet that a lot of you are NOT using them because you think that they’ll make you sound like everyone else or make your listing look silly. Well, here’s a very, very important lesson that we can all learn from this data: The numbers don’t lie, so go with the numbers, not your gut! Does it really matter if you don’t love the adjective luxurious if it nets you 9K more on your sales price? Seriously, is your personal opinion about an adjective worth 9K off your bottom line? Probably not. There is another “companion” word (actually three words) that can be used on a home at any level to attract serious buyers with ready money that Zillow has also documented as being worth nearly six percent on your sales tag. If you want to know that word, I’m betting you know what to do: Head on over to the REI Today Vault, our free resource library for every listener to this show. If you’re already a member, you can log right in to see that special word (It’s labeled – “Special, Price-Bumping Word” by the way so you can’t miss it) and it you’re not a member, then get your free membership RIGHT NOW by texting the word REITODAY (no spaces, no periods) to 33444 or visit REI.Today/vault and I’ll provide fast, free access to this powerful word and a lot more seriously insightful stuff that will make your real estate investing safer, faster, and more profitable. So just text the word REITODAY with no spaces or periods to 33444 or visit REI.Today/vault to get access now…
When you do that, you’ll also be able to GROW YOUR NETWORK by interacting with me and your fellow listeners to REI Today… so stop by to ask questions, make comments and network with other investors across the country! Just text the word REITODAY with no spaces or periods to 33444 or visit REI.today/vault right now for your free membership.
Thanks for listening in. Be sure to listen in to Episode #7, where you’ll get direct access to one of my favorite former Green Berets (okay, I think he may be the only Green Beret I know personally, but he’s a really amazing guy and a truly innovative real estate investor) and his secret to invading TOP HOT MARKETS and turning real estate profits without having to “put in your time” first. If you want to be in the hottest areas of the country but feel like the water has always been too deep for you before, you’re going to want to listen to this one right away. So until tomorrow,
REI Nation – always remember this: Your best investment is YOUR OWN EDUCATION!
Carole Ellis is the host of Real Estate Investing Today, a popular 9-minute daily podcast focused on educating real estate investors about the important topics that will make their investing SAFER, FASTER, and MORE PROFITABLE. She's also the editor of the Bryan Ellis Investing Letter. She has more than a decade's worth of experience in and reporting on the real estate industry and, additionally, has written dozens of courses on the topic. Carole lives in Kennesaw with her husband, Bryan, and four children. She believes wholeheartedly that your best investment is always your OWN education.